The American beurswaakhond SEC investigates so-called initial coin offerings (ICO), reports The Wall Street Journal on the basis of insiders.
This is a form of crowdfunding with digital coins with hardly any supervision, and where abuse is lurking.
Through ICO’s offer of a companies digital coins which give a right on a product or service that’s in progress, or a share of future profits.
In such transactions there is often no business model available, and in some cases, the initiators off with the money.
The beurswaakhond with dozens of companies now information is retrieved, according to the American business daily. The market for ICO’s last year was good for 6.5 billion dollars.
Experts believe that investment is very risky. Last year almost half of the new ICO’s are flopped or went to the company behind it going bust.